A Public Choice Perspective on the Legalization of Casino Gaming

Miao He, Ricardo C. S. Siu

Abstract

The public choice theory is applied in this study to explore the effects of the expected economic benefits and cost of voters in the process of casino legalization. It is shown that in contrast to most voting processes, the emotional inclination of voters and the related changes have an explicit role in determining the decision made on a ballot for casino legalization. A model is therefore proposed based on the existing literature (for e.g., Morton, 1991; Olson, 1965; Riker and Ordeshook, 1968) to show the interactions and decision making process of related policy makers, and beneficiary and anti-gaming groups. The arguments are elaborated and verified by using evidence from New Jersey and Taiwan, where state-wide referendums were adopted as part of the legalization process of casino gaming.